Seattle attorney Bill Gates Sr., father of one of the world's richest men, is fronting for a proposed ballot initiative in Washington state that would impose an income tax on - ironically enough - his state's wealthier residents.

AP Photo/Ted S. WarrenBill Gates Sr. talks with reporters in Seattle about an initiative he is sponsoring that would impose an income tax on wealthier Washingtonians.This development is pretty fascinating, and not just for residents of the Evergreen State, one of just seven states that now doesn't have an income tax.

First and foremost - for Oregon at any rate - imposing a state income tax on well-to-do residents would take away much of the incentive for wealthy Oregonians to move across the Columbia River to avoid state income taxes in Oregon.

The current tax disparity between the two states particularly acts as an incentive for folks who are selling a company or otherwise coming into large capital gains, which are taxed at the same rate as other income. All of a sudden, Oregon's post-Measure 66 top rate of 11 percent (which will drop to 9.9 percent in the 2012 tax year) wouldn't look quite the same if Initiative 1077 were to pass and impose a top rate of 9 percent.

(As a side note, one could argue that it would be in the interest of Oregon's business community to donate heavily to this initiative campaign; somehow I doubt that will happen).

As several other commentators point out, this new initiative is inspired in part by Oregon voters' passage in January of the Measures 66 and 67, which raised taxes on corporations and wealthy individuals.

Like the Oregon measures, Initiative 1077 is aimed at a small slice of the population. It would impose income taxes on the top 3 percent of the population with incomes of more than $200,000 for individuals and $400,000 for households.

Initiative 1077 also contains some pretty big incentives for other taxpayers. It would lower state property taxes by 20 percent and cut the state business and occupations tax, particularly for small businesses.

Opponents portray adopting this tax as the beginning of a slippery slope. Paul Guppy of the conservative Washington Policy Center told The Seattle Times that a new income tax would inevitably be expanded to cover more Washingtonians.

"Every other tax — and I could cite many examples — has started out with
a low rate and then gone up from there," Guppy said. "The federal income tax started
out at 1 percent."

But Gates has some powerful allies, including unions and other interests anxious to preverve public services. In recent years, in both Oregon and Washington, initiatives fiddling with the tax code have been dominated by conservatives. But now a liberal coalition - emboldened by the success of Oregon's tax referendum - will see if it can use the initiative system to force a major reform of the state's tax system.